Optus trips up on plan to be disruptive

Optus has made no secret of its desire to disrupt the status quo in digital media, but it is finding out the hard way that taking on Australia’s footy establishment is not without its risks.

Few things are more sacred to Australians than sport. And in the stoush over its controversial TV Now recording service, Optus has opened itself to criticism, however inaccurate, that it is threatening funding for two of the sports Australians hold dearest: Australian rules football and rugby league.

The AFL and NRL are engaged in a bitter struggle for sporting supremacy but Optus has achieved the rare feat of uniting the two codes against it, for a service that remains obscure and misunderstood by much of the public.

Having the AFL’s commander-in-chief,
Andrew Demetriou
, labelling you a “disgrace" and “reprehensible" and urging your subscribers to depart for your primary competitor can’t be great for brand awareness, particularly when said brand is undergoing a high profile relaunch.

Optus can justifiably feel aggrieved about the hyperbole surrounding TV Now. The most recorded TV shows using the service since it was launched are not AFL or NRL matches, but shows such as The Big Bang Theory, The Simpsons and (yes, it’s true) The Bold and The Beautiful.

Moreover, as industry group OzHub points out, the ruling casts serious doubt over a range of emerging cloud-based technologies, just as they begin to be embraced by companies and individuals.

More distressing perhaps is the fact that Telstra and Foxtel’s grip over content could mean consumers are forced to pay to watch content on mobile devices that is on the government’s anti-siphoning list and available for free on television.

That linkage hasn’t really been made yet, but it might become more of a concern if the trends towards consumption of video on mobile devices continues, and particularly if an integrated home in which content is viewed across multiple platforms takes hold as many anticipate.

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Optus has failed to articulate this point. It also failed to mobilise any support from the very TV networks whose broadcasts it is allowing users to record. Those networks are privately comfortable with TV Now as ultimately, it gives their advertisers a bigger audience.

But you wouldn’t know it by their silence, which is deafening.

While it considers whether to launch an appeal in the High Court and fends off criticism from the sporting establishment, Optus must be beginning to wonder whether it is worth the fuss.

The TV Now saga represents the first hiccup in the company’s new digital media strategy, which was launched by parent
Singapore Telecommunications
with much fanfare last month.

One of the explicit aims of the strategy is to create new growth engines and disrupt adjacent industries, such as media, in the same way device makers such as Apple and software providers such as Google have disrupted telcos in recent years.

SingTel’s new digital media strategy is compelling on a number of levels. Like other telcos, it has invested billions to maintain and upgrade its network infrastructure while services such as Microsoft’s Skype, Google Voice and Apple’s iMessage undercut its core voice and text messaging revenue streams.

SingTel has recognised that mobile carriers have access to the kind of intimate data the likes of Twitter, Facebook, Google and even Apple can only dream about. They also have permission from subscribers to use it.

Harnessing this information to develop applications and tap into the increasing amount of dollars consumers spend online using mobile devices is a logical step in the fightback against the so-called “over the top" players.

But TV Now could be a reminder that the ability of big lumbering telcos to foster the same type of innovation as the unencumbered technology companies of Silicon Valley, who carry the “disruptive" label as a badge of honour, is fraught with difficulties.